Transactions plus multiple statements. Glenwood Hospital had the following ending balances (in thousands) for its assets, liabilities, and net assets accounts as of December 31, 20X0.
Givens
Cash $8,000
Accounts receivable $58,000
Allowance for uncollectibles $8,000
Inventory or supplies $4,900
Prepaid insurance $1,500
Long-term investments $230,000
Plant, property, and equipment $250,000
Accumulated depreciation $90,000
Short-term accounts payable $20,000
Accrued expenses $8,700
Long-term debt $165,000
Unrestricted net assets $251,400
Temporarily restricted net assets $4,200
Permanently restricted net assets $5,100
List and record each 20X1 transaction under the accrual basis of accounting. Then develop a balance sheet for end-of-years 20X0 and 20X1 and a statement of operations and a statement of changes in net assets for the year ended December 31, 20X1.
a. The hospital made a cash payment of $7,100,000 toward outstanding accounts payable.
b. The hospital collected $34,000,000 in cash from outstanding accounts receivable.
c. The hospital provided $236,000,000 of services on credit.
d. The hospital consumed $3,100,000 of supplies in the provision of its ambulatory services.
e. The hospital paid cash for incurred interest expense of $4,100,000.
f. The hospital purchased $36,000,000 in long-term investments and used cash for this purpose.
g. The hospital incurred $8,100,000 in general expenses that it paid for in cash.
h. The hospital made a $3,900,000 cash principal payment toward its long-term debt.
i. The hospital collected $141,000,000 in cash from outstanding accounts receivable.
j. The hospital purchased $6,100,000 of supplies on credit.
k. The hospital earned, but did not receive, $330,000 in income from its restricted net assets. The income can be used for general operations. (Hint: this transaction increases interest receivable and is also recorded under revenues, gains, and other support.)
l. The hospital incurred $720,000 in interest expense, which it paid for in cash.
m. The hospital incurred $93,000,000 in labor expenses, which it paid for in cash.
n. The hospital made a cash payment of $730,000 in advance for insurance expense.
o. The hospital transferred $1,050,000 in cash to its parent corporation.
p. The hospital incurred $5,300,000 in depreciation expense.
q. The hospital’s prepaid insurance of $620,000 expired for the year.
r. The hospital recognized $1,000,000 in bad debt for the year and established a provision of bad debt for this amount.
s. The hospital made a cash payment of $14,100,000 for radiology equipment.